# In the matter of Ministry of Corporate Affairs Vs. Amit Chandrakant Shah and Ors. CA (AT) (Ins) No. 871-2020

> NCLAT judgment dated 2021-04-15. Citation: TCN-2021-NCLAT-00284. This Company Appeal (AT) (Ins) No.871/2020 arises from an order dated 09.08.2019 passed by…

- **Court:** NCLAT
- **Order date:** 15 Apr 2021
- **Citation:** TCN-2021-NCLAT-00284
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ministry-of-corporate-affairs-vs-amit-chandrakant-shah-and-ors-ca-6c59a5e8

## Summary

### Background

This Company Appeal (AT) (Ins) No.871/2020 arises from an order dated 09.08.2019 passed by the National Company Law Tribunal (NCLT), Bengaluru Bench, in IA No.457/2018 and IA No.256 of 2019 in CP(IB) No.06/PB/2018. The Ministry of Corporate Affairs, represented by the Registrar of Companies, Karnataka, filed the appeal. The initial application before the NCLT was filed by the Resolution Professional, Shri Amit Chandrakant Shah, under Section 66 of the Insolvency and Bankruptcy Code (IBC), seeking orders and directions regarding the write-off of receivables from Respondents Nos. 1 to 3. The Adjudicating Authority directed the Central Government to refer the matter to the Serious Fraud Investigation Office (SFIO) for further investigation into the affairs of the

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## Facts

The Ministry of Corporate Affairs, represented by the Registrar of Companies, Karnataka, filed an appeal against an order passed by the National Company Law Tribunal (NCLT), Bengaluru Bench. The initial application before the NCLT was filed by the Resolution Professional, Shri Amit Chandrakant Shah, under Section 66 of the Insolvency and Bankruptcy Code (IBC), seeking orders and directions regarding the write-off of receivables amounting to Rs.1,25,45,046/- from Respondents Nos. 1 to 3. The Adjudicating Authority directed the Central Government to refer the matter to the Serious Fraud Investigation Office (SFIO) for further investigation into the affairs of the Corporate Debtor, BCIL Red Earth Developers India Private Limited. The appellant argued that the Adjudicating

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority (NCLT) was correct in directly directing the Central Government …

**Ratio:** The Adjudicating Authority cannot directly direct an investigation by the SFIO without

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**Reasoning:** The NCLAT observed that an error occurred when the Adjudicating Authority gave directions

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**Interpretation:** Section 213 of the Companies Act, 2013, outlines the procedure for

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**Application:** In this case, the Adjudicating Authority directly directed the Central

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## Parties

- **Judges:** A.I.S. C…; Alok Sriv…
- **Appellants:** MINISTRY OF…
- **Respondents:** BCIL Red Earth…; Amit Chandrakant…

## Timeline

- **2019-08-09 — Order by NCLT Bengaluru…**: Order passed by National Company Law Tribunal, Bengaluru Bench in IA No.457/2018 and IA…
- **2019-09-20 — Judgement in Lagadapati Ramesh Vs. Ramanathan…**: Tribunal observed in Company Appeal…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66 — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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